WTI was further bolstered after the American Petroleum Institute (API) reported a draw of almost 1.1 million barrels in USA crude inventories last week versus analysts’ expectations for a 2.4 million-barrel build in a Reuters poll.
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The increase in US inventories was even more than the 1.7-million-barrel gain projected in a survey of analysts by The Wall Street Journal. Gasoline inventories rose by 1.6 million barrels last week, while distillate fuel stocks fell by 1.7 million barrels, the EIA said.
Fortune released an article today entitled Here’s Why Oil Prices Just Hit a 2016 High …with West Texas Intermediate (WTI) closing at $45.33 and Brent Crude closing at $47.34 per barrel according to Bloomberg Energy today, I was also wondering the same thing.
Brent crude futures were trading at $48.30 a barrel at 0644 GMT, up 31 cents from their last close. It gained 20 percent in April, the biggest monthly gain in a year.
“The supply drawdown is a sign that this enormous glut is starting to shrink”, said Phil Flynn, a senior market analyst at Price Futures Group Inc.in Chicago.
A Reuters poll of analysts had forecast a build of 2.4-million barrels.
“Bullish momentum from a technical perspective, in cahoots with dovish Fed rhetoric, has this market on fire again despite the crude inventories we’re seeing”, said Matt Smith, director of commodities research at New York-headquartered Clipperdata.
“A weaker US-dollar and expectations of stronger fundamentals drove crude oil prices higher”.
Oil companies rushed to cut costs and curtail investment as oil prices tanked over the past year-and-a-half, striking 12-year lows in January.
“Any news that could suggest a higher price is viewed as a good reason to buy”, analysts at Commerzbank said in a note. The price of Brent crude has now rebounded by more than 60% since January as investors see dwindling US production help rebalance the market later this year.
Oil has rallied since then, rising above $45 as US crude production slows and major producers including Saudi Arabia study a possible cap on output. The Federal Reserve said Wednesday that it would leave USA interest rates unchanged, while the bank of Japan said Thursday it would hold back from expanding stimulus.
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Oil prices pulled back a tick Friday from 2016 peaks, capping a fourth straight week of gains as the market pushed higher supported in part by a weaker USA dollar.
